Irate municipal customer withdraws support – and savings – from local bank

The Rautavaara municipality is a small community in eastern Finland, but it’s prepared to put its money where its mouth is. When the credit union bank Osuuspankki decided to shutter the local branch, the municipality decided to protest the move by pulling all of its funds out of the bank.

Many banks in Finland have trimmed their branch network following the advent of online banking services. However the people of Rautavaara signaled that they weren’t going to take the closure of their local branch lying down.

In April nearly one-third of the nearly 1,800 residents signed a petition protesting the branch closure. They also descended on the branch en masse to demonstrate against the planned termination.

Before plans to shutter the branch were revealed, the municipality had 620,000 euros in its local Osuuspankki account. Nowadays the bank balance comes in at 400,000.

Mayor: Balance will be zero by end of August

Mayor Unto Murto estimated that his town would be able to bring the balance down to zero by the end of August by paying expenses from its Osuuspankki account, without topping it up with fresh deposits.

The municipality will transfer all of its allegiance – and its funds – to Nordea Bank, where it has kept parallel accounts for years.

However much as they would like to, town leaders won’t be able to fully shake off their ties to Osuuspankki. Strict public tendering regulations would require them to do business with the bank if for example, it offered loans are lower rates than other bidders.

In fact, Rautavaara is still indebted to the credit union bank and will remain a credit customer – unless it finds itself able to pay off its existing loans.